Practice Test Chapter 2

If this economy devotes one-half of its viable resources to the production of baseballs and the other half to the production of bananas it could produce

awe would have to know the details of this economy technology ignorer to determine this

Boxes C and D of this circular-flow diagram represent

the markers for goods and services and the markets for factors of production

which of these terms are used interchangeably

"inputs" and "factors of production"

if this economy devotes all of its resources to the production of bananas, then it will produce

300 bananas and 0 baseballs

Which arrow represents the flow of spending by households?

A

which arrow represents the flow of goods and services

B

Which arrow represents the flow of land, labor, and capital?

C

if box A of this circular flow diagram represents firms, then which box represent households

box B

the production possibilities frontier is a graph that shows the various combinations of output that an economy

can produce

The shift of the production possibilities frontier from A to B illustrates

economic growth

if the owners of land, labor, and spiral are repseneted by box B of this circular flow diagram then

firms are represented by box A

which of the following is an example of normative as apposed to positive statement

income taxes should be reduced

which of the following statements best captures the relationship between microeconomics and macroeconomics

microeconomics and macroeconomics are distinct from one another, yet they are closely related

in the circular-flow diagram, which of the following is not a factor of production

money

it is possible for an economy to increase its production of both goods if the economy

moves from a situation of inefficient production to a situation of efficient production

if this economy moves from point A to point B, then which of the following statements is correct?

none of the above is correct (it is just reallocating resources to prioritize baseballs over bananas)

"prices rise when he quantities of money rises rapidly" is an example of a

positive economic statement

A macroeconomist might study

the effect of rising oil prices on employment in the airline industry

if box C of this circular-flow diagram represents the goods market then box D represents

the factor market

if the flow of goods and services is part of what is resented by the inter loop of this circular flow diagram then

the flow of factors of production is also part if what is represent by the inner loop

A movement from point C to point D could be caused by

unemployment

factors of production are

used to produce goods and services